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    Point price elasticity of demand

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    The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special":

    QD = 1,200,000 - 40P

    What is the point price elasticity of demand at prices of:

    (a) $8,000

    (b) $10,000

    © BrainMass Inc. brainmass.com December 24, 2021, 8:53 pm ad1c9bdddf

    Solution Preview

    dQ/dP = -40

    The price elasticity of demand is given by (dQ/dP)(P/Q) ...

    Solution Summary

    Point price elasticity of demand is examined. A complete, neat and step-by-step solution is provided.